Impact of Joining Rotating Savings and Credit Association (ROSCA) on Household Assets in Indonesia

Shochrul Rohmatul Ajija and Asif Iqbal Siddiqui
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Shochrul Rohmatul Ajija: Universitas Airlangga, Indonesia
Asif Iqbal Siddiqui: Nanyang Technological University, Singapore

No 2001, Economic Growth Centre Working Paper Series from Nanyang Technological University, School of Social Sciences, Economic Growth Centre

Abstract: The purpose of the research is evaluating the impact of Rotating Savings and Credit Association (RoSCA) in Indonesia, locally known as arisan on household assets of the participants. We use the Indonesian Family Life Survey (IFLS) data collected in 2000, 2007 and 2014 which contains demographic and household data of the arisan participants (i.e. affected group) and the non-participants (i.e. control group). We apply the Double Difference (DD) method in order to measure the impact of arisan participation on the household assets. The results of the DD estimation show that the participation in the association has a positive impact on the total household assets of the participants, although it has a mixed impact on the different categories of the household assets listed in IFLS data such as house, land, vehicles, appliances, furniture, appliances, jewelleries and savings. Finally, the implication of the results has been in discussed in the context of this long tradition of arisan participation in Indonesia along with its co-benefits. Despite arisan being is a special form of informal micro-savings institution prevalent for many centuries in Indonesia, there has not been adequate academic research on its economic implications where this paper intends to contribute.

Keywords: RoSCA; Arisan; micro-saving; household asset (search for similar items in EconPapers)
JEL-codes: D71 O16 O17 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2020-01
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